Answer:
According to the historical cost principle you should record assets on your balance sheet at the original price or cost that you bought them at, regardless of their market value. For eg if you bought a machine for 400,000 and its market price changes to 500,000 after you bought it, you will still record it at 400,000 on your balance sheet. So in this case the company bought the land and the building for 900,000 so they will record it at 900,000 at the time of the purchase as 900,000 is the historical cost of the land and the building.
Explanation:
Based on the appraised value of the land and the purchase price, at the time of purchase, the land will be recorded at $180,000.
This can be found by the formula:
= Purchase price x Appraisal value of land / Total appraised value of land and building
Solving gives:
= 900,000 x 200,000 / (200,000 + 800,000)
= 900,000 x 200,000 / 1,000,000
= $180,000
Find out more on appraised value at https://brainly.com/question/26080329.
